WonderDawg :we (humans) are hard-wired to move along a mood spec

DormRoom

The US has always gone into a recession with GDP growth of < 2%, since WWII. Third revision Q1 GDP was .08%. First revision Q2 GDP was 1.7%. We are likely in a recession right now, but bank economists won't say so, until their trading desks finish unwinding.

 

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Fri, 08/19/2011 - 22:14 | oblonsky

the funny thing about recessions is that if you tell people long enough that we're not in recession, it's actually possible that you prevent the recession from occurring. it's a self-fulfilling prophecy. if people think we won't enter a recession they may be willing to spend more, consider buying that house, car, whatever. but if you tell people "we're entering a recession" many people will put off those same purchases, and, lo and behold, the prediction will come true.

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Fri, 08/19/2011 - 23:15 | WonderDawg

Wrong on many levels. Business cycles demand recessions, they are a natural occurence in a healthy business cycle.

Also, we (humans) are hard-wired to move along a mood spectrum with optimism on one end and pessimism on the other. As we move across the spectrum, bull markets and bear markets occur. Socionomics postulates that these natural "mood swings" are the root motive of business cycles.

Whatever the case, you can't wish a recession away.

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Fri, 08/19/2011 - 23:19 | Caviar Emptor

Yup. The recession is all in our heads

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Fri, 08/19/2011 - 23:26 | WonderDawg

I left out a pretty important aspect of the socionomics theory: humans in a society collectively move from optimism to pessimism and back and forth again, in an endogenous instinct related to the primal herding impulse. This is the root motive for business cycles. That's the theory in a nutshell, as it applies to the economy.